Informality: Sectoral Selection and Earnings in Uruguay

Marisa Bucheli () and Rodrigo Ceni ()
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Marisa Bucheli: Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República
Rodrigo Ceni: Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República

No 2007, Documentos de Trabajo (working papers) from Department of Economics - dECON

Abstract: In this paper we define informal workers as those who are not contributing to the social security system. We analyse the likelihood of being informal and we estimate the differentials in earnings between sectors using both the OLS estimation and a switching regression model. We assess the premium for being formal by predicting five different proxies of the average gap. We use the crosssection data reported in a 2005 household survey. We find that formality is more likely among the better-educated, women, people residing in the capital city, heads of households and full-time workers. In addition, we find that according to the five measures of the gap, earnings are higher in the formal than in the informal sector.

Keywords: informal sector; wage differential (search for similar items in EconPapers)
JEL-codes: J31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab and nep-lam
Date: 2007-11
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Persistent link: http://EconPapers.repec.org/RePEc:ude:wpaper:2007

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